Oil prices resume fall in Asian trade

Oil prices fell on Thursday as a smaller-than-expected increase in US stockpiles was overshadowed by ongoing worries about a global supply glut while analysts said rises fuelled by hopes over key output talks had mostly been factored in.

The US Department of Energy on Wednesday reported another rise in US commercial crude stockpiles last week, by 2.3 million barrels.

While the increase was lower than analysts’ estimates of about three million barrels, it still pushed inventories to fresh record highs, in a market already brimming with supplies.

At around 0715 GMT, US benchmark West Texas Intermediate for delivery in May was down 39 cents to $37.93 while Brent crude was trading 25 cents lower at $39.01.

Prices have been easing since the middle of last week after rebounding from near 13-year lows reached in February, suggesting a rally driven by hopes of an output freeze by key producers may have run its course.

Traders have been moving back into oil thanks to a weaker dollar and hopes about an April 17 meeting in Doha of major oil producers led by Russia and Saudi Arabia to discuss measures to stabilise prices, including a possible output freeze.

“Strangely, crude oil was not moving up despite the fact that the dollar index has collapsed over the last three days,” said CMC Markets analyst Margaret Yang.

“One explanation is that hopes and expectations of an OPEC production freeze have been priced-in too early and traders are profit-taking,” she said in a note.

“On the other hand, oil inventories are still building and demand is weak,” she added.